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Sunday, April 14, 2024

NCLT declines to provide IFFCO with a temporary remedy


<p>In a case brought against Swan Energy and its joint venture company Triumph Offshore (TOPL), the National Company Law Tribunal (NCLT) denied Indian Farmers Fertilizer Cooperative (IFFCO) an injunction to stop providing security to lenders against debts.</p>
<p><img decoding=”async” class=”alignnone wp-image-492337″ src=”https://www.theindiaprint.com/wp-content/uploads/2024/03/theindiaprint.com-nclt-declines-to-provide-iffco-with-a-temporary-remedy-iffco-ie-11zon-750×422.jpg” alt=”theindiaprint.com nclt declines to provide iffco with a temporary remedy iffco ie 11zon” width=”976″ height=”550″ title=”NCLT declines to provide IFFCO with a temporary remedy 12″ srcset=”https://www.theindiaprint.com/wp-content/uploads/2024/03/theindiaprint.com-nclt-declines-to-provide-iffco-with-a-temporary-remedy-iffco-ie-11zon-750×422.jpg 750w, https://www.theindiaprint.com/wp-content/uploads/2024/03/theindiaprint.com-nclt-declines-to-provide-iffco-with-a-temporary-remedy-iffco-ie-11zon-768×432.jpg 768w, https://www.theindiaprint.com/wp-content/uploads/2024/03/theindiaprint.com-nclt-declines-to-provide-iffco-with-a-temporary-remedy-iffco-ie-11zon-390×220.jpg 390w, https://www.theindiaprint.com/wp-content/uploads/2024/03/theindiaprint.com-nclt-declines-to-provide-iffco-with-a-temporary-remedy-iffco-ie-11zon.jpg 1024w” sizes=”(max-width: 976px) 100vw, 976px” /></p>
<p>The Ahmedabad bench of the tribunal said in its ruling on Thursday that no relief would be given since the petitioner, IFFCO, was also a director on the TOPL board. In addition to directing IFFCO to provide a rejoinder within a week, NCLT also requested that TOPL call a board meeting to address the problems prior to the next hearing.</p>
<p>IFFCO and Swan Energy are partners in TOPL, with Swan Energy owning the majority 51% share. It was created in order to construct a floating storage and regasification unit, a unique floating ship fitted with LNG storage capabilities.</p>
<p>IFFCO claimed in its appeal that TOPL’s prepayment of the loan is “detrimental” to its interest as it would dilute its stake in the joint venture company. The petition also mentioned “oppression and mismanagement” when it was submitted earlier this month.</p>
<p>In the appeal that was submitted earlier this month, IFFCO claimed that TOPL had obtained a term loan of Rs 1,604 crore from a group of lenders, of which the State Bank of India had approved Rs 500 crore. All of IFFCO’s stake in TOPL was committed to the lenders in exchange for the loan.</p>
<p>Swan Energy was also aiming to raise around Rs 1,400 crore via a preferential issuance to a foreign firm, according to IFCCO, and TOPL was asking for permission to sell rights to Swan Energy in order to replace its bank credit with a promoter loan. IFFCO said that it didn’t need to seek any more money since it already had over Rs 400 crore in finances.</p>
<p>Swan Energy and TOPL had contested IFFCO’s petition’s maintainability and claimed it was submitted with malice and dishonest purpose.</p>


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